THE PRESIDENT: Thank you all for coming. A couple of points I want to
make to you. First, I'm excited about the energy initiative. American
people are beginning to see that we've made good progress on research
and development. We've got more to do. We're close to some
breakthroughs that will achieve an economic and national security
objective.

And I've enjoyed traveling around and talking to these scientists and
engineers that are really excited about how close we are to some
technological breakthroughs. Today, talking to the two scientists
involved with the cellulosic ethanol projects was exciting. These guys
are pretty fired up about it all, and they realize we've got a chance to
change our driving habits.

I do want to talk about this port issue. A foreign company manages some
of our ports. They've entered into a transaction with another foreign
company to manage our ports. This is a process that has been
extensively reviewed, particularly from the point of view as to whether
or not I can say to the American people, this project will not
jeopardize our security. It's been looked at by those who have been
charged with the security of our country. And I believe the deal should
go forward. This company operates all around the world. I have the
list somewhere. We can get you the list. They're in Germany and
elsewhere -- Australia.*

They -- in working with our folks, they've agreed to make sure that
their coordination with our security folks is good and solid. I really
don't understand why it's okay for a British company to operate our
ports, but not a company from the Middle East, when our experts are
convinced that port security is not an issue; that having worked with
this company, they're convinced that these -- they'll work with those
who are in charge of the U.S. government's responsibility for securing
the ports, they'll work hand in glove. I want to remind people that
when we first put out the Container Security Initiative, the CSI, which
was a new way to secure our ports, UAE was one of the first countries to
sign up.

In other words, we're receiving goods from ports out of the UAE, as well
as where this company operates. And so I, after careful review of our
government, I believe the government ought to go forward. And I want
those who are questioning it to step up and explain why all of a sudden
a Middle Eastern company is held to a different standard than a Great
British [sic] company. I'm trying to conduct foreign policy now by
saying to people of the world, we'll treat you fairly. And after
careful scrutiny, we believe this deal is a legitimate deal that will
not jeopardize the security of the country, and at the same time, send
that signal that we're willing to treat people fairly.

Thirdly, I'm looking forward to my speech tomorrow about my trip to
India and Pakistan. It's going to be an important trip, one where we'll
work on a variety of issues with both countries -- security, prosperity
and trade; working with India, of course, on energy security. It will
be an important trip.

I'll answer some questions, and then we're getting ready to land.

Q Mr. President, leaders in Congress, including Senator Frist, have
said that they'll take action to stop the port control shift if you
don't reverse course on it. You've expressed your thoughts here, but
what do you say to those in Congress who plan to take legislative
action?

THE PRESIDENT: They ought to listen to what I have to say about this.
They ought to look at the facts, and understand the consequences of what
they're going to do. But if they pass a law, I'll deal with it, with a
veto.

Q Mr. President, on energy and foreign policy, some Saudi officials
have said they're unhappy with being targeted about Middle Eastern oil,
saying that you wanted to reduce dependence on Middle East oil. You've
got a close relationship with King Abdullah --

THE PRESIDENT: I do.

Q -- he's been to see you. Have you heard something directly,
yourself, from the Saudis?

THE PRESIDENT: No, I haven't talked to His Majesty, but if I did, I
would say, I hope you can understand that the relationship between
supply and demand is so tight that any disruption on the supply side of
energy causes our prices to go up, and spiking prices hurts our economy.
And secondly, there are parts of the world where people would -- that
don't agree with our policy, namely Iran, for example. And that it's
not in our interest to be dependent, when it comes to our economic
security, and for that matter, national security, in a market that is
volatile. And so hopefully he'll understand.

Q So you don't think they should take offense at the comments about
Middle Eastern oil?

THE PRESIDENT: I would think that he would be understanding that new
technologies will enable us to diversify away from our reliance upon
crude oil. As a matter of fact, it's not only a message for the United
States, that's also a message for India and China. In order for these
growing economies to be able to be competitive, they're going to have to
learn how to use technologies that will enable them to meet the needs of
their people, but also the international demands of the world for good
environment, for example. The Nuclear Energy Initiative I'll be talking
to the Indians about is an important initiative.

Q The understatement today, and one of the concerns of lawmakers
seems to be that they want more of a briefing, and they want more
details about the things that you know, that have given you confidence
that there aren't any national security implications with the port deal.
Are you willing to either have your staff or to give any kind of
briefing to leaders of Congress --

THE PRESIDENT: Look at the company's record, Jim, and it's clear for
everybody to see. We've looked at the ports in which they've operated.
There is a standard process mandated by Congress that we go through,
called the CFIUS process. I'm not exactly sure if there's any national
security concerns in briefing Congress. I just don't know. I can't
answer your question.

Q It seems like -- you've already heard from different administration
officials, saying, not in as strong terms as you have today, that there
aren't problems with this deal, that the deal should go forward. But
they seem to want more of a briefing. Would you be willing to give any
additional briefings, either --

THE PRESIDENT: We'll be glad to send --

Q -- either in a classified basis, or --

THE PRESIDENT: I don't see why not. Again, you're asking -- I need to
make sure I understand exactly what they're asking for.

Yes. Oh, you're not the press.

MR. BARTLETT: I could ask a question. You showed some strong
leadership today -- (laughter.)

Q Why is it so important to you, sir, that you take on this issue as
a political fight? Clearly, there's bipartisan --

THE PRESIDENT: I don't view it as a political fight. So do you want to
start your question over? I view it as a good policy.

Q Why is it -- clearly --

THE PRESIDENT: Are you talking about the energy issue?

Q No, I'm sorry, the ports issue.

THE PRESIDENT: It's not a political issue.

Q But there clearly are members of your own party who will go to the
mat against you on this.

THE PRESIDENT: It's not a political issue.

Q Why are you -- to make this, to have this fight?

THE PRESIDENT: I don't view it as a fight. I view it as me saying to
people what I think is right, the right policy.

Q What's the larger message that you're conveying by sticking to this
UAE contract, by saying that you're not going to budge on this, or you
don't want to change policy?

THE PRESIDENT: There is a process in place where we analyze -- where
the government analyzes many, many business transactions, to make sure
they meet national security concerns. And I'm sure if you -- careful
review, this process yielded a result that said, yes, a deal should go
forward.

One of my concerns, however, is mixed messages. And the message is,
it's okay for a British company, but a Middle Eastern company -- maybe
we ought not to deal the same way. It's a mixed message. You put
interesting words in your question, but I just view -- my job is to do
what I think is right for the country. I don't intend to have a fight.
If there's a fight, there is one, but nor do I view this as a political
issue.

Q I say it because you said you'd be willing to use the veto on it.

THE PRESIDENT: I would. That's one of the tools the President has to
indicate to the legislative branch his intentions. A veto doesn't mean
fight, or politics, it's just one of the tools I've got. I say veto, by
the way, quite frequently in messages to Congress.

Q Mr. President, Israel is halting payments to the Palestinians --
the tax monies. What do you think about that, and what is the next
step?

THE PRESIDENT: I'll just give you our government's position, and that
is, we have said that -- well, first of all, the U.S. government doesn't
give direct grants to Palestine, we go through the Palestinian
Authority, we go through -- we give grants through NGOs from our USAID,
to help people. But my statement still stands, that so long as Hamas
does not recognize Israel's right to exist, my view is we don't have a
partner in peace, and therefore shouldn't fund a government that is not
a partner in peace. I thought the elections were important. I was one
voice that said the elections should go forward on time.

But I recognized that, one, elections are the first step in many cases
in evolution of a true democracy; and secondly, that elections show --
give everybody a true look at how -- what people are thinking on the
street; and thirdly, though, that because the Palestinians spoke,
doesn't necessarily mean we have to agree with the nature of -- the
party elected. And the party elected has said, we're for the
destruction of Israel. And our policy is, two states living side by
side in peace. And therefore, it's hard to have a state living side by
side in peace when your stated objective is the destruction of one of
the states. So my policy still stands, what I said day one after the
Hamas elections.

Q Can I ask you about a domestic issue, the prescription drug benefit
plan. A lot of Democrats are on recess, and they want to make a big
campaign issue out of this this year. What makes you think that the
problems that this program being rolled out has had are something other
than just the glitches that you've described?

THE PRESIDENT: I'm glad that they're making this an issue. This is --
the reforms that we passed in the Medicare law were necessary and are
going to change people's lives in a positive way. And I look forward to
talking about this issue next fall, if that's one of the issues they
want to talk about, because I understand the impact that this law is
going to have on seniors. And millions have signed up, and millions are
realizing the benefit of this program. And so it's -- we have done the
right thing in passing this law. Seniors are given different options.
Seniors are going to get an extraordinarily good drug benefit. We have
helped modernize Medicare. And looking forward to talking about it.